Impact of COVID-19 on the Stock Market: Evidence from the Banking Sector of UAE

Abstract

The aim of this research is to analyze the impact of COVID-19 on the stock prices of UAE banks. The regressions were applied to estimate the impact of COVID-19 data on the banks’ stock. The data include information about confirmed COVID-19 and the daily prices of the banks from October till December of 2020. The empirical results show that the stock prices of the banks in UAE are negatively and significantly impacted by the reported number of daily Covid-19 cases. However, the daily reported covid-19 fatalities have no significant impact on the stock price. Besides some implications, such as future pandemics should have a similar impact on the stock market of UAE can be predicted based on the empirical results. These results would help the government and financial regulators in undertaking in advance the controlling measures to curb down the spread of contagions to sustain the banking sector performance in the stock market. Hence, this research paper will be beneficial for the banks globally and for governments, to understand the overall impact of pandemics on the financial market and the greater economy.